Ascena Retail Group, the owner of brands like Lane Bryant, Ann Taylor and Catherines, is preparing to file for bankruptcy and close at least 1,200 of its 2,800 stores as soon as this week, according to Bloomberg.
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The company closed all of its stores on March 18 amid the coronavirus pandemic and had only reopened 450 stores by late May. This was a big hit for the retail giant, as store revenue accounts for 60 percent of its total revenue.
“COVID-19 has significantly disrupted our business,” Acena interim Executive Chair Carrie Teffner commented May 28. “Despite aggressive actions to preserve liquidity, the pandemic has significantly reduced our earnings and cash flow, resulting in increased levels of debt and deferred liabilities. With retail stores making up the majority of our revenue and cash flow, the uncertainty created by COVID-19 requires us to evaluate all options available to protect the business and its stakeholders.”
Ascena was already struggling amid a wider decline in brick-and-mortar retail. Iconic American clothing brand Brooks Brothers is also reportedly preparing to file for bankruptcy this week. Other retailers, like JCPenney, Neiman Marcus and J. Crew, have already filed for bankruptcy since the coronavirus pandemic hit.
Ascena did not immediately respond to a request for comment Tuesday.
Bloomberg reports that after Ascena files for bankruptcy, the credit agreement will eliminate about $700 million of its $1.1 billion debt.
Shares of Ascena stock are down 82 percent on the year.